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Alhamra Islamic Active Allocation Fund
Alhamra Islamic Active Allocation Fund 301
CONTENTS
Fund’s Information
Report of the Directors of the Management Company
Condensed Interim Statement of Assets and Liabilities
Condensed Interim Income Statement (Un-audited)
Condensed Interim Statement of Comprehensive Income (Un-audited)
Condensed Interim Statement of Movement in Unit Holder’s Funds (Un-audited)
Condensed Interim Cash Flow Statement (Un-audited)
Notes to and forming part of the Condensed Interim Financial Statements (Unaudited)
302
303
309
310
311
312
313
314
Alhamra Islamic Active Allocation Fund 302
FUND’S INFORMATION
Management Company MCB-Arif Habib Savings & Investments Limited24th Floor, Centre Point, Off Shaheed-e-Millat ExpresswayNear K.P.T. Interchange, Karachi
Board of Directors Mian Muhammad Mansha ChairmanMr. Nasim Beg Vice ChairmanMr. Muhammad Saqib Saleem Chief Executive OfficerDr. Syed Salman Ali Shah DirectorMr. Haroun Rashid DirectorMr. Ahmed Jahangir DirectorMr. Samad A. Habib DirectorMr. Mirza Qamar Beg Director
Audit Committee Mr. Haroun Rashid ChairmanMr. Ahmed Jahangir MemberMr. Mirza Qamar Beg MemberMr. Nasim Beg Member
Human Resource & Dr. Syed Salman Ali Shah ChairmanRemuneration Committee Mr. Nasim Beg Member
Mr. Haroun Rashid MemberMr. Ahmed JahangirMr. Muhammad Saqib Saleem Member
Chief Executive Officer Mr. Muhammad Saqib Saleem
Chief Financial Officer &Company Secretary Mr Abdul Basit
Trustee MCB Financial Services Limited4th Fioor. Pardesi House, Old Queens Road,Karachi,PakistanPh: (92-21) 32419770Fax: (92-21) 32416371Web: www.mcbfsl.com.pk
Bankers MCB Bank LimitedDubai Islamic Bank Pakistan LimitedBank Islami Pakistan LimitedAskari Bank LimitedBank AL Habib LimitedUnited Bank Limited
Auditors A.F Ferguson & Co.Chartered Accountants(A Member Firm of PWC NetworkState Life Building 1-CI.I. Chundrigar Road, Karachi.
Legal Advisor Bawaney & Partners3rd & 4th Floor, 68 C, Lane 13, Bukhari Commercial AreaPhase VI, D.H.A.,Karachi
Transfer Agent MCB-Arif Habib Savings & Investments Limited24th Floor, Centre Point,Off Shaheed-e-Millat ExpresswayNear K.P.T. Interchange,Karachi.
Rating AM2++Asset Manager Rating assigned by PACRA
Alhamra Islamic Active Allocation Fund 303
REPORT OF THE DIRECTORS OF THE MANAGEMENT COMPANYFOR THE QUARTER ENDED SEPTEMBER 30, 2017
Dear Investor,On behalf of the Board of Directors, I am pleased to present Alhamra Islamic Active Allocation Plan –I and Plan IIaccounts review for the quarter ended September 30th, 2017 (launched on December 29, 2016 and June 16, 2017respectively).
ECONOMY AND MONEY MARKET OVERVIEW
The economic scorecard in first quarter of FY18 posted a mixed picture relative to several economic indicators. The LSMgrew at an astounding pace of 13% YoY, boosted by growth in Steel, Auto and Food & Beverages sector. Add to this theagricultural sector growth (being reflected in cotton crop, sugar crop and wheat crop bumper numbers coming in), we arewell on our way to meet the 6% target GDP growth for FY18.
CPI for the first quarter averaged at a moderate level of 3.4% YoY, supported by lower oil prices, stable food prices anda higher base effect. Going forward we expect inflation to remain under control, averaging below 4.5% for FY18, as stablecommodity prices along with a contained currency to rein in inflation. As a result of the stable indicators, the monetarypolicy committee maintained a status quo in its f irst meeting held for the current f iscal year.
Indicators that have started to sound a warning alarm include the widening fiscal deficit and current account deficit (CA).On the back of rising overall imports bill, the CA deficit for 2MFY18 has doubled from USD 1.3bn in SPLY to USD 2.6bn.As a result of the financing gap, the foreign exchange reserves of the country fell by USD 1.3 billion during the 1QFY18.
Fiscal account which was one source of comfort turned out to be a red herring. Fiscal deficit for FY17 was recorded at ~PKR 1.8 tn and provinces recorded an unexpected deficit on account of election preparation spending. Keeping this inview we remain skeptical on the government’s ability to meet the target of 4.1% of GDP.
PIB yields during the quarter inched up by ~45 bps for 3 year, and 56 bps for 5 year bonds. Political uncertainty alongwith deterioration in the external account kept the market participants at bay from long tenor bonds. Furthermore, thebearish sentiment was also backed by SBP in its MPS, which highlighted its concerns on external account as trade deficitwidened.
EQUITIES MARKET OVERVIEW
Equity market remained in the red zone throughout the quarter with political uncertainty taking the centre stage. AfterPrime Minister’s disqualification and continuous worsening of external account caused the benchmark index to lose ~11.5%in 2MFY18, foreign buying drove gains in Sep’17 where KSE-100 gained 2.9% in Sep’17 to close at 42,409 pts. However,the first quarter of the new fiscal year closed itself down 8.9%, the worst quarterly return since FY09.
During the quarter, foreigners remained net sellers of USD 90 million; the buying was majorly absorbed by Banks (USD$33.5 mn) & Insurance Companies (USD $49.3 mn). Sep’17 saw the first net foreign inflow (US$28 mn) since the startof fiscal year, primarily on account of inclusion of five Pakistani stocks (MCB, BAFL, SNGP, THAL and MTL) in the FTSEGlobal Indices. Average volumes during the quarter dwindled to 178 Mn shares compared to 280 Mn shares in thepreceding quarter while average value traded declined to PKR 9.3 Bn from PKR 15.0 Bn from last quarter.
Amongst major sectors that pulled the index down were cements (down 28% QoQ) continuing the lackluster performanceon concerns over future pricing discipline on upcoming capacity expansions of ~5 Mn tons in the next 6-7 months in theSouthern region. In the banking space, sentiments turned out to be sour when HBL received a notice from New York (NY)State Department of Financial Services (DFS) seeking to impose a hefty penalty of USD 629.6 mn on the bank which waslater reduced to US$225 Mn. Fertilizer sector (down 3% QoQ) recouped some of the losses in third month of the quarteron the back of surge in international urea prices by ~22% in September 2017. Autos also continued to witness correction(-19% QTD) along with dampened sentiments due to anticipated pressure on USD-PKR parity as external account continuedto deteriorate. E&Ps was the only major sector that witnessed gains (up by 8% QoQ) due to increase in oil prices by ~22%QoQ peaking at US$ 56.6/bbl.
FUND PERFORMANCE
Alhamra Islamic Active Allocation Plan –I
The Fund was launched on December 29, 2016. During the period, the fund posted a negative return of 6.38% againstthe negative return of 8.57% for the benchmark.
The fund was 62.4% invested in Alhamra Islamic Stock Fund and 31.8% invested in Alhamra Islamic Income Fund at theperiod end.
The Net Assets of the Fund as at September 30, 2017 stood at Rs. 1,460 million. The Net Asset Value (NAV) per unit asat September 30, 2017 was Rs. 93.6309
Alhamra Islamic Active Allocation Plan –II
The fund was launched on June 16, 2017. During the period, the fund posted a negative return of 2.37% against a negativereturn of 8.55% for the benchmark.
The fund was 8.8% invested in Alhamra Islamic Stock Fund and 84.7% invested in Alhamra Islamic Income Fund as at30th September, 2017.
The Net Assets of the Fund as at September 30, 2017 stood at Rs. 814 million. The Net Asset Value (NAV) per unit asat September 30, 2017 was Rs. 97.6336
FUTURE OUTLOOK
While the government has been able to stabilize the economy, its ambitious plan to revive the growth can come in doldrumsif it is not able to contain the twin deficits. We project a current account deficit of USD 17 billion for the FY18, and as suchthe ability of government to manage inflows will be highly tested. Nevertheless, our in-house projections estimate afinancing gap of USD 6 billion which will gobble up the existing foreign exchange reserves. On the whole, cracks havestarted appearing in the economic façade which warrant immediate policy measure by the government of Pakistan if theeconomic progress is expected to be kept on track.
Going forward, we expect market to remain volatile in the short run, as political uncertainty along with twin deficits continueto haunt the basic macroeconomic fundamentals. We believe certain policy adjustments are necessary to maintain thedirection of economic growth. Nevertheless, market valuations remain at a very attractive level, and they will sooner orlater come into play. The risk premiums (difference between earnings yield and 10-year interest rates) are at historicallyhigh level, suggesting market to remain very cheap. Furthermore, KSE-100 trades at a forward P/E of 7.9x, at a steepdiscount of 35% from its emerging market peer group. Enduring themes that should play out over the medium-termregardless of the political situation include (i) PKR depreciation and higher interest rates (ii) CPEC and continued GoPsupport for the textiles sector that would encourage exports. We advice local investors to carefully watch the economictrends and build exposure on any weakness.
On the fixed income front, market is expected to remain cautious on back of a precarious external account position alongwith an uptick in inflation trajectory. Visibility on economic front, in particular to balance of payments, would guide furtherparticipation towards fixed income markets.
ACKNOWLEDGMENT
The Board is thankful to the Fund’s valued investors, the Securities and Exchange Commission of Pakistan and theTrustees of the Fund for their continued cooperation and support. The Directors also appreciate the efforts put inby the management team.
On behalf of Directors,
Muhammad Saqib Saleem Samad A. Habib
Chief Executive Officer DirectorOctober 20, 2017
REPORT OF THE DIRECTORS OF THE MANAGEMENT COMPANYFOR THE QUARTER ENDED SEPTEMBER 30, 2017
Alhamra Islamic Active Allocation Fund 304
Alhamra Islamic Active Allocation Fund 305
Alhamra Islamic Active Allocation Fund 306
Alhamra Islamic Active Allocation Fund 307
Alhamra Islamic Active Allocation Fund 308
CONDENSED INTERIM STATEMENT OF ASSETS AND LIABILITIESAS AT September 30, 2017
Alhamra Islamic Active Allocation Fund 309
For MCB-Arif Habib Savings and Investments Limited(Management Company)
ASSETS
Bank balancesInvestmentsProfit receivableAdvances, deposits, prepaymets and other receivablePreliminary expenses and floatation costsTotal assets
LIABILITIES
Payable to MCB-Arif Habib Savings and Investments Limited -Management Company
Payable to MCB Financial Services Limited - TrusteePayable to the Securities and Exchange Commission of PakistanDividend PayableAccrued expenses and other liabilitiesTotal liabilities
NET ASSETS
UNIT HOLDERS’ FUND (AS PER STATEMENT ATTACHED)
CONTINGENCIES AND COMMITMENTS
NUMBER OF UNITS IN ISSUE
NET ASSET VALUE PER UNIT
The annexed notes 1 to 16 form an integral part of these financial statements.
AIAAP - I AIAAP - II Total Total2017 2017 2017 2016
Note
53,572771,424
18811
-825,195
1,459,647 814,014 2,273,661 1,672,210
1,459,647 814,014 2,273,661 1,672,210
15,589,364 8,337,437
93.6309 97.6336
(Number of units)
(Rupees)
--------------------(Rupees in 000)--------------------
133,8682,153,864
586230
3,1102,291,657
80,2961,382,440
398219
3,1101,466,462
117,5641,567,787
3,308139
3,7401,692,538
5,832121726
12,830819
20,328
5,738160453
-11,64417,996
3806089
-10,65111,181
5,358100364
-992
6,815
Chief Executive Officer DirectorChief Financial Officer
45
6
78
9
10
12
CONDENSED INTERIM INCOME STATEMENT (UN-AUDITED)FOR THE QUARTER ENDED SEPTEMBER 30, 2017
Alhamra Islamic Active Allocation Fund 310
For MCB-Arif Habib Savings and Investments Limited(Management Company)
AIAAP - I AIAAP - II Total
2017 2017 2017
--------------------(Rupees in 000)--------------------
7
September30
September30
September30
Sep 30, 2017
INCOME
Loss on sale of investments - netUnrealised (diminution) on re-measurement of investments
at fair value through profit or loss - netProfit on bank balancesNet element of Income included in prices of units issued less those in units redeemed.Other income
EXPENSESRemuneration of the Management CompanySindh sales tax on remuneration of the Management CompanyRemuneration of the TrusteeSindh sales tax on remuneration of the TrusteeAnnual fee to the Securities and Exchange Commission of PakistanAllocated expenses and related taxesPrinting chargesSettlement and bank chargesListing feeLegal and Professional ChargesAuditors' remunerationAmortisation of preliminary expenses and floatation costsTotal expenses
Provision against Sindh Workers' Welfare Fund
Net loss for the period before taxation
Taxation
Net loss for the period after taxation
Allocation of Net loss Income for the period:
Loss / (Income) already shared / (paid) on units redeemed
Accounting (loss) / income available for distribution:
-Relating to capital gains
-Excluding capital gains
Accounting (loss) / Income available for Distribution
The annexed notes 1 to 16 form an integral part of these financial statements.
Chief Executive Officer DirectorChief Financial Officer
Note
5.2
(11,015)
(89,377)1,305
1,046(98,042)
22329
31241
364433
3667
4977
6302,207
-
(100,249)
-
(100,249)
705
(99,686)
142
(99,544)
(8,983)
(49)404
45(8,584)
577
1001389
1068605
17-
409
-
(8,993)
-
(8,993)
22
(9,010)
39
(8,971)
(19,998)
(89,426)1,708
(10,784)1,090
(106,625)
28136
41254
454539
4412
5494
6302,617
-
(109,242)
-
(109,242)
727
(108,696)
181
(108,515)
STATEMENT OF COMPREHENSIVE INCOME (UN-AUDITED)FOR THE QUARTER ENDED SEPTEMBER 30, 2017
Alhamra Islamic Active Allocation Fund 311
For MCB-Arif Habib Savings and Investments Limited(Management Company)
AIAAP - I AIAAP - II Total
2017 2017 2017
--------------------(Rupees in 000)--------------------
September30
September30
September30
Net loss for the period after taxation
Other comprehensive income / (loss) for the period
Total comprehensive (loss) for the period
The annexed notes 1 to 16 form an integral part of these financial statements.
Chief Executive Officer DirectorChief Financial Officer
(100,249)
-
(100,249)
(8,993)
-
(8,993)
(109,242)
-
(109,242)
CONDENSED INTERIM STATEMENT OF MOVEMENT IN UNIT HOLDERS’ FUND (UN-AUDITED)FOR THE QUARTER ENDED SEPTEMBER 30, 2017
Alhamra Islamic Active Allocation Fund 312
AIAAP - I AIAAP - II Total
2017 2017 2017--------------------(Rupees in 000)--------------------
September30
September30
September30
Net assets at the beginning of the period
Issue of unitsRedemption of units
Accounting loss for the period(Loss) / Income already (shared) / paid on units redeemed-HFT
Net assets as at the end of the period
Net Assets value per unit as at beginning of the period
Net Assets value per unit as at end of the period
Distribution during for the period:
Undistributed income brought forward comprises of:- Realised Gain- Unrealised Gain
Accounting loss available for distribution:-Relating to capital gains-Excluding capital gains
Distributions during the period
Undistributed loss carried forward
Undistributed loss carried forward comprises of:- Realised Gain- Unrealised Gain
The annexed notes 1 to 16 form an integral part of these financial statements.
Note
1212
1,584,241
10,722(35,067)(24,345)
(99,544)(705)
1,459,647
100.0163
93.6309
-
(6,534)6,792
258
(99,686)142
(99,544)
-
(99,286)
(9,908)(89,377)(99,286)
87,969
736,526(1,488)
735,038
(8,971)(22)
814,014
100.0057
97.6336
-
49(44)
5
(9,010)39
(8,971)
-
(8,966)
(8,917)(49)
(8,966)
1,672,210
747,248(36,555)710,692
(108,515)(727)
2,273,661
-
(6,485)6,748
263
(108,696)181
(108,515)
-
(108,252)
(18,826)(89,426)
(108,252)
For MCB-Arif Habib Savings and Investments Limited(Management Company)
Chief Executive Officer DirectorChief Financial Officer
CONDENSED INTERIM CASH FLOW STATEMENT (UN-AUDITED)FOR THE QUARTER ENDED SEPTEMBER 30, 2017
Alhamra Islamic Active Allocation Fund 313
AIAAP - I AIAAP - II Total
2017 2017 2017
September30
September30
September30
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss for the period
Adjustments for:Unrealised (appreciation) / diminution on re-measurement of investments classified
as 'financial assets at fair value through profit or loss' - netAmortisation of preliminary expenses and floatation costs
Increase in assetsInvestmentsProfit receivableAdvances, deposits, prepaymets and other receivable
Increase in liabilitiesPayable to MCB-Arif Habib Savings and Investments Limited -
Management CompanyPayable to MCB Financial Services Limited - TrusteePayable to the Securities and Exchange Commission of PakistanDividend PayableAccrued expenses and other liabilities
Net cash flows from operating activities
CASH FLOWS FROM FINANCING ACTIVITIES
Amount received against issuance of unitsAmount paid against redemption of unitsNet cash flows from financing activities
Net increase in cash and cash equivalents during the periodCash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
The annexed notes 1 to 16 form an integral part of these financial statements.
For MCB-Arif Habib Savings and Investments Limited(Management Company)
Chief Financial Officer
(109,242)
89,426630
(19,186)
(675,501)2,722
(672,870)
(94)39
(273)(12,830)
10,824(2,332)
(694,388)
747,248(36,555)710,692
16,395117,564
133,868
Note
4
(100,249)
89,377630
(10,242)
21,0152,641
(80)23,576
(399)(10)
(359)(12,672)
178(13,261)
74
10,722(35,067)(24,345)
(24,272)104,568
80,296
(8,993)
49-
(8,944)
(696,516)81
(11)(696,446)
3054986
(158)10,64610,929
(694,461)
736,526(1,488)
735,038
40,57612,996
53,572
(91)
Chief Executive Officer Director
NOTES TO AND FORMING PART OF THE CONDENSED INTERIM FINANCIAL INFORMATION (UN-AUDITED)FOR THE QUARTER ENDED SEPTEMBER 30, 2017
Alhamra Islamic Active Allocation Fund 314
1 LEGAL STATUS AND NATURE OF BUSINESS
1.1 Al-Hamra Islamic Active Allocation Fund (the Fund) was established under a Trust Deed dated, November 25, 2016,executed between MCB-Arif Habib Savings and Investments Limited as Management Company and MCB FinancialServices Limited as Trustee. The Fund was approved by the Securities and Exchange Commission of Pakistan (SECP)on December 02, 2016 under the Non-Banking Finance Companies and Notified Entities Regulations, 2008 (the NBFCRegulations 2008).
1.2 The Management Company of the Fund has been licensed to act as an Asset Management Company under the NonBanking Finance Companies (Establishment and Regulation) Rules, 2003 (the NBFC Rules) through a certificate ofregistration issued by the SECP. The registered office of the Management Company is situated at 24th Floor, Centre Point,Off. Shaheed-e-Millat Expressway, Near KPT interchange, Karachi, Pakistan.
1.3 The Fund is an open-ended mutual fund and has been categorised as "Shariah Compliant Asset Allocation Fund of Funds".The units of the Fund are redeemable subject to a contingent load.
1.4 The duration of the Fund is perpetual. However, Allocation Plans launched may have a set time frame. The Fund commencedits operations from December 29, 2016 and on that date, had offered one type of Allocation Plan (Plan-I). However, theFund has launched Allocation Plan-II from June 16, 2017. The Fund is allowed to invest in Shariah Compliant CollectiveInvestment Schemes or in cash and / or near cash instruments as allowed under circular no. 07 of 2009 dated March 6,2009 issued by the SECP. The maturity of Allocation Plan I and II is two years from the close of the initial period i.e.December 29, 2018 and June 16, 2019 respectively.
1.5 The Pakistan Credit Rating Agency Limited (PACRA) has assigned an asset manager rating of AM2++ dated June 23,2017 to the Management Company. The Fund is listed on the Pakistan Stock Exchange Limited.
1.6 The title to the assets of the Fund is held in the name of MCB Financial Services Limited as Trustee of the Fund.
2 BASIS OF PREPARATION
2.1 Statement of compliance
This condensed interim financial information has been prepared in accordance with the approved accounting standardsas applicable in Pakistan for interim financial reporting. Approved accounting standards comprise of such InternationalFinancial Reporting Standards (IFRSs) issued by the International Accounting Standards Board as are notified under theCompanies Act 2017, the requirements of the Trust Deed, the Non-Banking Finance Companies (Establishment andRegulations) Rules, 2003 (the NBFC Rules), the Non-Banking Finance and Notified Entities Regulations, 2008 (the NBFCRegulations) and the directives issued by the Securities and Exchange Commission of Pakistan (SECP). Wherever therequirements of the Trust Deed, the NBFC Rules, the NBFC Regulations, Companies Act 2017 or the directives issuedby the SECP differ with the requirements of IFRSs, the requirements of the Trust Deed, the NBFC Rules, the NBFCRegulations, Companies Act 2017 or the directives issued by the SECP prevail.
2.2 The Companies Act, 2017 was enacted on 30th May 2017 and is applicable with immediate effect. However, owing to thepractical difficulty being faced by the companies in the preparation of the Financial Statements Circular No. 17/ 2017 datedOctober 06, 2017 issued by Institute of Chartered Accountants of Pakistan to be read with circular no. 23 of 2017 datedOctober 04, 2017 issued by Securities and Exchange Commission of Pakistan (SECP) have notified that the companieswhose interim period ends on or before 31 December 2017, shall prepare their financial statements in accordance withthe provisions of the repealed Companies Ordinance, 1984.
2.3 These condensed interim financial statements do not include all the information and disclosures required in the annualfinancial statements and should be read in conjunction with the financial statements of the Fund for the year ended June30, 2017.
2.4 These condensed interim financial statements are unaudited and are presented in Pak rupees, which is the functional andpresentation currency of the Fund. Figures have been rounded off to the nearest thousand rupees unless otherwisespecified.
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3.1 The accounting policies and methods of computation adopted in the preparation of this condensed interim financialinformation are the same as those applied in preparation of the financial statements of the Fund for the year ended June30, 2017 except for change in accounting policy for recognition of Element of income / (loss) and capital gains / (losses)included in the prices of units issued less those in units redeemed (Element of Income) discussed in detail in Note No.3.2.
NOTES TO AND FORMING PART OF THE CONDENSED INTERIM FINANCIAL INFORMATION (UN-AUDITED)FOR THE QUARTER ENDED SEPTEMBER 30, 2017
Alhamra Islamic Active Allocation Fund 315
4 BANK BALANCES
In current accountIn savings account
5 INVESTMENTS
At fair value through profit or loss - held for trading- Units of open end mutual funds
5.1 At fair value through profit or loss - held for trading
5.1.1 Allocation Plan I - Units of open end mutual funds (related party)
Note AIAAP - I AIAAP - II Total2017 2017 2017
6,33647,23553,572
Note AIAAP - I AIAAP - II Total2017 2017 2017
5.1 771,424
----------(Rupees in 000)----------
----------(Rupees in 000)----------
71,103,335 47,034,607 34,000,521 84,137,421 1,008,606 915,415 (93,191) 63% 66%
6,151,984 3,947,931 5,525,749 4,574,166 463,211 467,025 3,813 32% 34%
1,471,817 1,382,440 (89,377)
---------------(Rs in "000")---------------
2,35477,94280,296
1,382,440
8,691125,177133,868
2,153,864
Alhamra Islamic Stock Fund
Alhamra Islamic Income Fund
As atseptember
30, 2017
Name of the fundPurchased
duringthe period
Unrealisedappreciation/ (diminution)
as atSeptember
30, 2017
Marketvalue as apercentageof net assets
Carryingvalue as
atSeptember
30, 2017
Marketvalue as apercentage
of totalinvestment
Marketvalue as
atAs atJuly 1,
2017
Soldduring
theperiod
Number of units
September30, 2017
995,004
2405,000
33550
10,729
Management remuneration payableSindh sales tax payable on management remunerationSales load payablePreliminary expenses and floatation costs payablePayable against allocated expensesOthers
3,740630
3,110
NOTES TO AND FORMING PART OF THE CONDENSED INTERIM FINANCIAL INFORMATION (UN-AUDITED)FOR THE QUARTER ENDED SEPTEMBER 30, 2017
Alhamra Islamic Active Allocation Fund 316
5.1.2 Allocation Plan II - Units of open end mutual funds (related party)
Note AIAAP - I AIAAP - II Total2017 2017 2017
5.1.1 & 5.1.2 1,382,440 771,424 2,153,864
5.1.1 & 5.1.2 1,471,817 771,473 2,243,290
(89,377) (49) (89,426)
----------(Rupees in 000)----------5.2 Unrealised (diminution) on re-measurement
of investments classified as financial assets at fair valuethrough profit or loss - net
Market value as at September 30
Less: carrying value as at September 30
Alhamra Islamic Stock Fund 2,029,221 6,693,834 9% 9%Alhamra Islamic Income Fund 495,648 6,842,233 86% 91%
---------------(Rs in "000")---------------
As atseptember
30, 2017
Name of the fundPurchased
duringthe period
Unrealisedappreciation/ (diminution)
as atSeptember
30, 2017
Marketvalue as apercentageof net assets
Carryingvalue as
atSeptember
30, 2017
Marketvalue as apercentage
of totalinvestment
Marketvalue as
atAs atJuly 1,
2017
Soldduring
theperiod
Number of units
September30, 2017
(2,646)
2,597
(49)
72,829
698,595
771,424
75,475
695,998
771,473
18,570,102
2,560,537
23,234,715
8,907,122
AIAAP - I AIAAP - II Total2017 2017 2017
AIAAP - I AIAAP - II Total2017 2017 2017
----------(Rupees in 000)----------
----------(Rupees in 000)----------
6 PRELIMINARY EXPENSES AND FLOATATION COSTS
Preliminary expenses and floatation costs As at 1 Jul 2017Less: amortisation during the periodClosing balance
7 PAYABLE TO MCB-ARIF HABIB SAVINGS ANDINVESTMENTS LIMITED-MANAGEMENT COMPANY
3,740630
3,110
--
-
AIAAP - I AIAAP - II Total2017 2017 2017
----------(Rupees in 000)----------8 PAYABLE TO MCB FINANCIAL SERVICES
LIMITED - TRUSTEE
Trustee remuneration payableSindh sales tax payable on Trustee remuneration
1289
100
537
60
6596
160
6910
-5,000
25030
5,358
314
240-
8520
380
NOTES TO AND FORMING PART OF THE CONDENSED INTERIM FINANCIAL INFORMATION (UN-AUDITED)FOR THE QUARTER ENDED SEPTEMBER 30, 2017
Alhamra Islamic Active Allocation Fund 317
AIAAP - I AIAAP - II Total2017 2017 2017
----------(Rupees in 000)----------
9.1 As a consequence of the 18th amendment to the Constitution of Pakistan, in May 2015 the Sindh Workers’ Welfare FundAct, 2014 (SWWF Act) had been passed by the Government of Sindh as a result of which every industrial establishmentlocated in the Province of Sindh, the total income of which in any accounting year is not less than Rs 0.50 million, isrequired to pay Sindh Workers’ Welfare Fund (SWWF) in respect of that year a sum equal to two percent of such income.The matter was taken up by the MUFAP with the Sindh Revenue Board (SRB) collectively on behalf of various assetmanagement companies and their CISs whereby it was contested that mutual funds should be excluded from the ambitof the SWWF Act as these were not industrial establishments but were pass through investment vehicles and did notemploy workers. The SRB held that mutual funds were included in the definition of financial institutions as per the FinancialInstitution (Recovery of Finances) Ordinance, 2001 and were, hence, required to register and pay SWWF under the SWWFAct. Thereafter, MUFAP has taken up the matter with the Sindh Finance Ministry to have CISs / mutual funds excludedfrom the applicability of SWWF. However, as a matter of abundant caution provision in respect of SWWF is being madeon a prudent basis with effect from the date of enactment of the Sindh WWF Act, 2014 (i.e. starting from May 21, 2015).
36413679
-149264992
1883
10,5951116
10,651
38214483
10,595149280
11,633
9 ACCRUED EXPENSES AND OTHER LIABILITIES
Auditors' remunerationPrinting chargesPayable to legal advisorSale Load Payable- MCB Bank LimitedOthersProvision for Sindh Workers' Welfare Fund
Had the provision for SWWF not been recorded in the financial statements of the Fund, the net asset value of Plan I andII as at September 30, 2017 would have been higher by Re 0.0169 per unit and Re 0.0004 per unit respectively.(2017:Plan 1 0.0167 per unit and Plan II 0.0034 per unit)
10 CONTINGENCIES AND COMMITMENTS
There were no contingencies and commitments outstanding as at September 30, 2017.
11 NUMBER OF UNITS IN ISSUE
Total units in issue at the beginning of the periodAdd: units issued during the period ( Reinvested by theunitholders against their dividend entitlement - net of tax in AIAAP-I)Less: redemptions during the periodTotal units in issue as at September 30, 2017
AIAAP - I AIAAP - II Total2017 2017 2017
---------- (Units) ----------
12 TOTAL EXPENSE RATIO
The Total Expense Ratio (TER) of the Fund as at September 30, 2017 is 0.15% (Plan-I) and 0.11% (Plan-II) which includes0.04% (Plan-I) and 0.03% (Plan-II) representing government levies on the Fund such as sales taxes, annual fee to theSECP, etc. This ratio is within the maximum limit under the NBFC Regulations for a collective investment scheme.
13 TAXATION
13.1 The Fund is exempt from taxation under clause 99 of the Part I of the 2nd Schedule of the Income Tax Ordinance, 2001,subject to the condition that not less than 90% of its accounting income for the year as reduced by capital gains whetherrealised or unrealised is distributed amongst the unit holders, provided that for the purpose of determining distribution ofnot less than 90% of its accounting income for the year, the income distributed through bonus units shall not be takeninto account. Furthermore, as per Regulation 63 of the Non-Banking Finance Companies and Notified Entities Regulations,2008, the Fund is required to distribute 90% of the net accounting income other than capital gains to the unit holders.
15,839,822107,206
(357,664)
15,589,364
879,6437,472,906
(15,112)
8,337,437
16,719,4657,580,112(372,775)
23,926,801
NOTES TO AND FORMING PART OF THE CONDENSED INTERIM FINANCIAL INFORMATION (UN-AUDITED)FOR THE QUARTER ENDED SEPTEMBER 30, 2017
Alhamra Islamic Active Allocation Fund 318
13
.2T
he
Fu
nd
is
als
o e
xe
mp
t fr
om
th
e p
rov
isio
ns
of
se
cti
on
11
3 (
min
imu
m t
ax
) u
nd
er
cla
us
e 1
1A
of
Pa
rt I
V o
f th
e S
ec
on
dS
ch
ed
ule
to
th
e I
nc
om
e T
ax
Ord
ina
nc
e,
20
01
. T
he
ma
na
ge
me
nt
inte
nd
s t
o d
istr
ibu
te a
t le
as
t 9
0%
of
the
in
co
me
ea
rne
dd
uri
ng
th
e y
ea
r b
y th
e F
un
d t
o t
he
un
it h
old
ers
. A
cco
rdin
gly
, n
o p
rovi
sio
n h
as
be
en
ma
de
in
th
is c
on
de
nse
d i
nte
rim
fin
an
cia
ls
tate
me
nt.
14
TR
AN
SA
CT
ION
S W
ITH
CO
NN
EC
TE
D P
ER
SO
NS
/ R
EL
AT
ED
PA
RT
IES
Re
late
d p
art
ies
/ c
on
ne
cte
d p
ers
on
s o
f th
e F
un
d i
nc
lud
e M
CB
-Ari
f H
ab
ib S
av
ing
s a
nd
In
ve
stm
en
ts L
imit
ed
(b
ein
g t
he
Ma
na
ge
me
nt
Co
mp
an
y)
an
d i
ts r
ela
ted
en
titi
es
, M
CB
Fin
an
cia
l S
erv
ice
s L
imit
ed
(b
ein
g t
he
Tru
ste
e o
f th
e F
un
d),
oth
er
co
lle
cti
ve
in
ve
stm
en
t s
ch
em
es
an
d p
en
sio
n s
ch
em
es
ma
na
ge
d b
y t
he
Ma
na
ge
me
nt
Co
mp
an
y, a
ny
pe
rso
n o
r tr
us
tb
en
efi
cia
lly
ow
nin
g (
dir
ec
tly
or
ind
ire
ctl
y)
ten
pe
rce
nt
or
mo
re o
f th
e c
ap
ita
l o
f th
e M
an
ag
em
en
t C
om
pa
ny
or
the
ne
t a
ss
ets
of
the
Fu
nd
an
d d
ire
cto
rs,
ke
y m
an
ag
em
en
t p
ers
on
ne
l a
nd
off
ice
rs o
f th
e M
an
ag
em
en
t C
om
pa
ny.
Tra
ns
ac
tio
ns
wit
h r
ela
ted
pa
rtie
s /
co
nn
ec
ted
pe
rso
ns
are
in
th
e n
orm
al
co
urs
e o
f b
us
ine
ss
, a
t c
on
tra
cte
d r
ate
s a
nd
te
rms
de
term
ine
d i
n a
cc
ord
an
ce
wit
h m
ark
et
rate
s.
Re
mu
ne
rati
on
of
the
Ma
na
ge
me
nt
Co
mp
an
y a
nd
th
e T
rus
tee
is
de
term
ine
d i
n a
cc
ord
an
ce
wit
h t
he
pro
vis
ion
s o
f th
e N
BF
CR
eg
ula
tio
ns
, 2
00
8 a
nd
th
e T
rus
t D
ee
d r
es
pe
cti
ve
ly.
Th
e d
eta
ils
of
tra
ns
ac
tio
ns
ca
rrie
d o
ut
by
th
e F
un
d w
ith
co
nn
ec
ted
pe
rso
ns
/ r
ela
ted
pa
rtie
s a
nd
ba
lan
ce
s w
ith
th
em
at
the
pe
rio
d e
nd
are
as
fo
llo
ws
:
14
.1U
nit
Ho
lde
rs'
Fu
nd
14
.1.1
Alh
am
ra I
sla
mic
As
se
t A
llo
ca
tio
n P
lan
I
14.1
Uni
t Hol
ders
' Fun
d
14.1
.1A
lham
ra Is
lam
ic A
sset
Allo
catio
n P
lan
I
Alh
amra
Isla
mic
Sto
ck F
und
Alh
amra
Isla
mic
Inco
me
Fund
MC
B E
mpl
oyee
s P
ensi
on F
und
Dire
ctor
s an
d ke
y m
anag
emen
t per
sonn
el o
f the
Man
agem
ent C
ompa
ny
14.1
.2A
lham
ra Is
lam
ic A
sset
Allo
catio
n P
lan
II
Alh
amra
Isla
mic
Sto
ck F
und
Alh
amra
Isla
mic
Inco
me
Fund
MC
B E
mpl
oyee
s P
ensi
on F
und
For
the
quar
ter
ende
d S
epte
mbe
r 30
, 201
7
As
at J
uly
01,
2017
Issu
ed
for
cash
Bon
usR
edee
med
As
at
Sep
tem
ber
30, 2
017
As
at
July
01,
201
7
Issu
ed
for
cash
Bon
usR
edee
med
As
at
Sep
tem
ber
30, 2
017
71,1
03,3
35
6,15
1,98
4
586,
520
4,00
7
2,02
9,22
1
495,
648
751,
350
47,0
34,6
07
3,94
7,93
1 - -
23,2
34,7
15
8,78
9,59
0 -
- - - - - - -
34,0
00,5
21
5,52
5,74
9 - -
18,5
70,1
02
2,56
0,53
7 -
84,1
37,4
21
4,57
4,16
6
586,
520
4,00
7
6,69
3,83
4
6,72
4,70
2
751,
350
871,
016
621,
815
58,6
62 401
24,8
58
50,0
98
75,1
39
550,
000
400,
000 - -
260,
000
893,
500 -
400,
000
560,
000 - -
200,
000
260,
000 -
915,
415
467,
025
54,9
16 375
72,8
29
686,
683
73,3
57
----
----
--(R
upee
s in
000
)---
----
---
----
----
--(U
NIT
S)-
----
----
-
NOTES TO AND FORMING PART OF THE CONDENSED INTERIM FINANCIAL INFORMATION (UN-AUDITED)FOR THE QUARTER ENDED SEPTEMBER 30, 2017
Alhamra Islamic Active Allocation Fund 319
14.2 Details of transactions with related parties / connected persons during the period
MCB-Arif Habib Savings and InvestmentsLimited - Management Company
Remuneration of the Management Company(including indirect taxes)
Allocated expenses and related taxes
MCB Financial Services Limited - TrusteeRemuneration of the Trustee (including indirect taxes)
AIAAP - I AIAAP - IISeptember 30 September 30
2017 2017 Total
----------(Rupees in 000)----------
AIAAP - I AIAAP - II Total Total
June 30
2017
----------(Rupees in 000)----------
September 30
2017
14.3 Details of balances with related parties / connected persons as at period end
MCB-Arif Habib Savings and InvestmentsLimited - Management Company
Management remuneration payableSindh sales tax payable on management remunerationSales load payablePreliminary expenses and floatation costs payablePayable against allocated expensesOthers
MCB Financial Services Limited - TrusteeTrustee remuneration payableSindh sales tax payable on Trustee remuneration
MCB Bank Limited - Parent of the Management CompanyBank balanceSale Load Payable
15 GENERAL
Corresponding figures have been rearranged and reclassified, wherever necessary, for the purpose of better presentation.No significant reclassifications have been made during the current period.
For MCB-Arif Habib Savings and Investments Limited(Management Company)
252433
353
65106
112
317539
465
6810
-5,000
25030
1289
2,354-
314
240-
8520
537
6,33610,595
9914
2405,000
33560
6596
8,69110,595
55473
75000
13860
10714
7571-
Chief Executive Officer DirectorChief Financial Officer
16 DATE OF AUTHORISATION FOR ISSUE
These financial statements were authorised for issue on October 20, 2017 by the Board of Directors of the ManagementCompany.
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